Budget Enforcement

US Budget Enforcement Act was made effective from 1990. The 2nd and the 7th paragraphs of the act were amended and replaced. The Act was passed and also later amended by the United States Congress. This act was formulated to control the budget deficit. The Act supervises and assesses the condition of the budget control procedures which is led by the Federal Government. Under this Act the Federal government is restricted to take any such step that might harm the economy of the country.

New Introductions by the Act

The Act that was formulated in 1990, amended and again brought into affect in 1997 introduced two new methods of controlling the budget. The methods are:

• There is a set of rules to control the appropriate spending by the government.
• There is also a PayGo procedure introduced to control the taxes that is controlled by the government.

The law differs from the targets that need to be matched pertaining to the fixed deficits. There will not be any imposition of penalty in case the deficit for a specific year outgrows the estimate of that year presented by the Office of Management and Budget provided the budget has also overgrown Congress’ estimation. The Act has been extended many times. In the most recent times it was extended to the Balanced Budget Act of 1997. The Democrats after ascending the throne have given it a lot of significance and have taken it up as priority at the Congress.

The Effects of Introduction of New Methods of Controlling the Budget

The mechanisms devised to control the budget are not targeted towards a specific surplus or deficit instead they are applied to achieve a sustained goal. However, the gulf between the compulsory and the discretionary spending would remain as it is. The mechanisms would prevent any kind of encroachment on each others periphery.